| Tue 11 Jan 2011, 9:00 | | GEN - Simon Property Group Inc. - No intention to make a firm offer for the |
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JSE
GEN
GEN - Simon Property Group, Inc. - No intention to make a firm offer for the
entire share capital of Capital Shopping Centres Group Plc ("CSC")
CSC shareholders urged to vote against The Trafford Centre acquisition at EGM
11 January 2011
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
For immediate release
SIMON PROPERTY GROUP, INC. ("SIMON")
CAPITAL SHOPPING CENTRES GROUP PLC ("CSC")
NO INTENTION TO MAKE A FIRM OFFER FOR THE ENTIRE SHARE CAPITAL OF CAPITAL
SHOPPING CENTRES GROUP PLC
CSC SHAREHOLDERS URGED TO VOTE AGAINST THE TRAFFORD CENTRE ACQUISITION AT EGM
On December 15, 2010 Simon announced an indicative offer of 425p for CSC`s
entire share capital (less any dividend declared, made or paid after that date).
Access to satisfactory due diligence from CSC is the only non-waivable
outstanding precondition to Simon announcing a firm offer. If a firm offer were
to be announced, it would be subject to a number of conditions including a non-
waivable condition relating to the Trafford acquisition not proceeding. Despite
numerous overtures from Simon and in full knowledge that Simon, given this due
diligence precondition, is not able to announce a firm offer without it, the CSC
board has refused to share any due diligence information with Simon. Simon
therefore has no alternative other than to announce that it does not intend to
make an offer for the entire share capital of CSC, and CSC shareholders are
unfortunately thereby deprived of the option to sell their shares pursuant to
such an offer.
On January 7, 2011, CSC announced revised terms for its proposed acquisition of
the Trafford Centre. It is readily apparent that the CSC board revised the
terms of the Trafford acquisition in response to pressure from Simon, despite
having initially expressed unwillingness to contemplate revising the terms of
the transaction. The revised terms do not address Simon`s fundamental concerns
and the transaction remains deeply unattractive for CSC shareholders:
- The CSC board is still proposing to relieve the owner of the Trafford Centre
of a potential tax liability of more than GBP300 million and to transfer
significant control of CSC to Peel at a discounted price.
- The purchase price for the acquisition of the Trafford Centre is still too
high.
- The transaction is still cash flow negative by c. GBP27 million on an annual
pro forma basis reducing dividend and cash flow coverages.
- Existing CSC shareholders are still not being given the opportunity to
participate in the discounted share issue and suffering a further dilution of
their holdings in a company that had 376 million ordinary shares outstanding on
a fully diluted basis in May 2008, but will have 897.5 million shares
outstanding on a fully diluted basis if the Trafford transaction is completed on
the revised terms, an astonishing increase of nearly 140%.
As Simon also announced on January 7, 2011, the CSC`s board`s belief in
"potential net asset value of up to 625p (per CSC share)" represents, in Simon`s
view, wishful thinking and was designed to frustrate Simon`s offer. If the CSC
board really believes in this potential value, why are they proposing to issue
33% of the company`s existing shares to Peel at a price of 400p, thereby
diluting existing shareholders?
Simon therefore continues to oppose the value-destructive Trafford Centre
transaction and urges its fellow CSC shareholders to vote against it at the CSC
EGM on January 26, 2011.
Simon reserves the right to sell some or all of its existing holding in CSC
and/or to acquire, and/or to offer to acquire, CSC shares or interests in CSC
shares, subject to Simon and its concert parties not increasing their holding in
CSC to more than 29.9% of CSC`s share capital. For the purposes of Rule 2.8 of
the Code, Simon reserves the right to make or participate in an offer for CSC
(and/or take any other action which would otherwise be restricted under Rule 2.8
of the Code) within the next six months following the date of this announcement:
(i) with the agreement or recommendation of the Board of CSC;
(ii) following the announcement of an offer by or on behalf of a third party for
CSC;
(iii) following the announcement by CSC of a "whitewash" proposal (for the
purposes of Note 1 on the Notes on Dispensations from Rule 9 of the Code) or a
reverse takeover (as set out in Note 2 on Rule 3.2 of the Code); or
(iv) if there is a material change of circumstances.
Simon currently holds 5.11% of CSC`s issued share capital or 35,355,794 shares
in total.
Enquiries:
Simon
Shelly Doran (Investors) Telephone: +1 317 685 7330
Les Morris (Media) Telephone: +1 317 263 7711
Citi Telephone: +44 (0) 20 7986 4000
(Financial adviser to Simon)
Philip Robert-Tissot
Grant Kernaghan
Charles Lytle
Lazard Telephone: +44 (0) 20 7187 2000
(Financial adviser to Simon)
Jeffrey Rosen
William Rucker
Patrick Long
Evercore Telephone: +44 (0) 20 7268 2702
(Financial adviser to Simon)
Julian Oakley
Citigate Dewe Rogerson Telephone: +44 (0) 20 7638 9571
(UK media adviser to Simon)
Grant Ringshaw
Patrick Donovan
Tom Baldock
Sard Verbinnen & Co Telephone: +1 212 687 8080
(US media adviser to Simon)
Hugh Burns
Brooke Gordon
Nathaniel Garnick
Citi, which is authorised and regulated in the United Kingdom by the Financial
Services Authority, is acting for Simon and no one else in relation to the
matters referred to in this announcement and will not be responsible to anyone
other than Simon for providing the protections afforded to customers of Citi or
for providing advice in relation to the contents of this announcement.
Lazard & Co., Limited, which is authorised and regulated in the United Kingdom
by the Financial Services Authority, is acting for Simon and no one else in
relation to the matters referred to in this announcement, and will not be
responsible to anyone other than Simon for providing the protections afforded to
customers of Lazard & Co., Limited or for providing advice in relation to the
contents of this announcement.
Evercore Partners, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting for Simon and no one else in
relation to the matters referred to in this announcement and will not be
responsible to anyone other than Simon for providing the protections afforded to
customers of Evercore Partners or for providing advice in relation to the
contents of this announcement.
Goldman Sachs International, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting for Simon and no one else
in relation to the matters referred to in this announcement and will not be
responsible to anyone other than Simon for providing the protections afforded to
customers of Goldman Sachs International or for providing advice in relation to
the contents of this announcement.
Deutsche Bank, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting for Simon and no one else in relation to
the matters referred to in this announcement and will not be responsible to
anyone other than Simon for providing the protections afforded to customers of
Deutsche Bank or for providing advice in relation to the contents of this
announcement.
Morgan Stanley, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting for Simon and no one else in relation to
the matters referred to in this announcement and will not be responsible to
anyone other than Simon for providing the protections afforded to customers of
Morgan Stanley or for providing advice in relation to the contents of this
announcement.
Dealing Disclosure Requirements
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any
class of relevant securities of an offeree company or of any paper offeror
(being any offeror other than an offeror in respect of which it has been
announced that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer period and,
if later, following the announcement in which any paper offeror is first
identified. An Opening Position Disclosure must contain details of the person`s
interests and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any paper offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made
by no later than 3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later than 3.30 pm
(London time) on the 10th business day following the announcement in which any
paper offeror is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a paper offeror prior to the deadline
for making an Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%
or more of any class of relevant securities of the offeree company or of any
paper offeror must make a Dealing Disclosure if the person deals in any relevant
securities of the offeree company or of any paper offeror. A Dealing Disclosure
must contain details of the dealing concerned and of the person`s interests and
short positions in, and rights to subscribe for, any relevant securities of each
of (i) the offeree company and (ii) any paper offeror, save to the extent that
these details have previously been disclosed under Rule 8. A Dealing Disclosure
by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm
(London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a paper offeror, they will be deemed to be a
single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any
offeror and Dealing Disclosures must also be made by the offeree company, by any
offeror and by any persons acting in concert with any of them (see Rules 8.1,
8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made can
be found in the Disclosure Table on the Takeover Panel`s website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. If you are in any doubt as to whether you are required to make
an Opening Position Disclosure or a Dealing Disclosure, you should contact the
Panel` s Market Surveillance Unit on +44 (0)20 7638 0129.
Date: 11/01/2011 09:00:08 Produced by the JSE SENS Department.
